director's Report

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Directors’ Report

A PRESENTATION BY : Saurabh Maheshwari, Independent Research Analyst

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Road Map for Presentation

What is Director’s Report?

Content of Director’s Report

Case Study on Directors’ Report of

Maruti Suzuki India Ltd / Tata Steel Ltd. /

NTPC Ltd.

Conclusion

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What is Director’s Report

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ABOUT DIRECTORS’ REPORT

DIRECTORS’

“The Directors' Report is a document produced by the board of directors’ under requirements of the legal law. It is useful for shareholders to find out issues such as whether the company has good finances, whether the market has potential, and whether the business has the structural capacity to expand into new opportunities. So Directors Report remains unique because it is a direct communication from the directors to the shareholders.”

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LEGAL REQUIRMENT OF DIRECTORS’ REPORT

Companies, however, does not specify the content of the Directors Report. It directs companies to follow the directives of the Companies Act 1956, Section 217. A Directors Report is mandatory according to the Companies Act 1956, Section 217.

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CONTENT OF DIRECTORS’ REPORT

1. Financial Results of the Company2. Financial Highlights3. Dividend Information4. Rating of Financial Instruments (If)5. Concern for Environment6. Details of Subsidiaries Companies7. Human Resource8. Details of Directors

CONTENT OF DIRECTORS’ REPORT……

9. Director’s Responsibility Statement 10.Discloser of Accounting Standard

regarding Consolidated Financial Statement

11.Discloser regarding Compliance certificate or Auditor’s certificate on Compliance

12. Details of Auditors

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CONTENT OF DIRECTORS’ REPORT……

13.Research & Development14.Foreign Exchange Earnings & Out Go

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CASE STUDY ON DIRECTORS’ REPORT OF MARUTI SUZUKI INDIA LTD / TATA STEEL LTD. / NTPC LTD.

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1. FININCIAL RESULTS OF THE COMPANY

Content of Directors

Report AUTO SECTOR STEEL SECTOR POWER SECTOR Maruti Suzuki India Ltd Tata Steel Ltd. NTPC Ltd. (Maharatna Company) Mar-10 Mar-11 Mar-12 Mar-10 Mar-11 Mar-12 Mar-10 Mar-11 Mar-12

1. Financial Results of the Company

Total Revenue (Rs. In Millions) 301231.5 371272 364139.5 258757.7 305728 353309 492466.5 592478.4 648306.5EBIDTA (Rs. In Millions) 44510.5 41472.7 33397.5 98058.8 126587.4 129342.1 153444.5 159002.3 166746.6PBT (Rs. In Millions) 35925.3 31087.6 21461.9 72143 97768.5 98573.5 108854.6 119935.8 121713.2

PAT (Rs. In Millions) 24976.2 22886.5 13351.4 50468 68656.9 66964.2 87282 91025.9 92237.3

2. DIVIDEND INFORMATION

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Content of Directors'

Report AUTO SECTOR STEEL SECTOR POWER SECTOR Maruti Suzuki India Ltd Tata Steel Ltd. NTPC Ltd. (Maharatna Company)

Mar-10 Mar-11 Mar-12 Mar-10 Mar-11 Mar-12 Mar-10 Mar-11 Mar-12

2. Dividend Information

Per Equity Share

(Director's Recommen

ded) 6 7.5 7.5 8 12 12 3.8 3.8 4

Total Amount (Rs. In Millions) 1733 2167 2167 709.77 1151.1 1165.5 31332 31332 32980

3. RATING OF FINANCIAL INSTRUMENTS (DEBT INSTRUMENTS)

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3 AUTO SECTOR STEEL SECTOR POWER SECTOR

Maruti Suzuki India Ltd Tata Steel Ltd. NTPC Ltd. (Maharatna Company)

Mar-

10 Mar-11 Mar-12 Mar-10 Mar-11 Mar-12 Mar-10 Mar-11 Mar-12

3. Rating of Financial Instruments (Debt Instruments)

Long term (Rating by

CRISIL) AAA AAA AAA No Debt Instrument Issued AAA AAA AAA

Short Term (Rating by

CRISIL) P1+ P1+ A1+ No Debt Instrument Issued A1+ A1+ A1+

4. CONCERN FOR ENVIORNMENT

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Content of

Directors' Report AUTO SECTOR STEEL SECTOR POWER SECTOR

Maruti Suzuki India Ltd Tata Steel Ltd.NTPC Ltd. (Maharatna

Company)

Mar-10 Mar-11 Mar-12 Mar-10 Mar-11 Mar-12 Mar-10 Mar-11 Mar-124. Concern for Environment

Award / Recogniti

on 7 16 9 16 18 16 3 3 4

5. DETAILS OF SUBSIDIARIES

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Content of Directors' Report AUTO SECTOR STEEL SECTOR POWER SECTOR

Maruti Suzuki India Ltd Tata Steel Ltd.

NTPC Ltd. `(Maharatna

Company)

Mar-10 Mar-11 Mar-12Mar-

10Mar-

11Mar-

12Mar-

10Mar-

11Mar-

125. Details of Subsidiaries Companies 7 8 8 20 21 21 6 5 5

6. HUMAN RESOURCES (NO. OF EMPLOYEES

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Content of Directors'

Report AUTO SECTOR STEEL SECTOR POWER SECTOR


Company)

Mar-

10 Mar-11 Mar-12 Mar-10 Mar-11 Mar-12 Mar-10 Mar-11 Mar-12

6. Human Resources (No. Of Employees) 7200 8500 9100 34101 34912 35793 23743 23797 24011

7. DETAILS OF DIRECTOR’S

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Maruti Suzuki India Ltd Tata Steel Ltd. NTPC Ltd. (Maharatna Company)


7. Details of Directors

Independent Director 0 4 4 9 6 7 9 9 16Non-Independent

Director 0 0 0 6 7 6 0 0 0

Executive Director 4 4 4 1 1 1 8 10 7

Non-Executive Director 7 7 3 14 12 11 12 2 2

8. DISCLOSER OF ACCOUNTING STANDARDS

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Maruti Suzuki India Ltd Tata Steel Ltd. NTPC Ltd. (Maharatna Company) Mar-10 Mar-11 Mar-12 Mar-10 Mar-11 Mar-12 Mar-10 Mar-11 Mar-12

8. Discloser Accounting Standard

AS-21 on Consolidated Financial Statements YES YES YES YES YES YES YES YES YES

AS-23 on Accounting for Investment in Associates YES YES YES YES YES YES YES YES YES

AS-27 on Financial Reporting for interest in Joint ventures YES YES YES YES YES YES YES YES YESAS-15 on Employee Benefit

Scheme YES YES YES YES YES YES YES YES YES

AS-20 on Earning Per Share YES YES YES YES YES YES YES YES YES

AS-26 on Intangible Assets YES YES YES YES YES YES YES YES YES

AS-28 on Impairment of Assets YES YES YES YES YES YES YES YES YES

9. DETAILS OF AUDITORS

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Content of

Directors'

Report AUTO SECTOR STEEL SECTOR POWER SECTOR


Company)


9. Details of Auditors 1 1 1 1 1 1 6 6 6

10. RESEARCH AND DEVELOPMENT

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Maruti Suzuki India

Ltd Tata Steel Ltd.NTPC Ltd. (Maharatna

Company)

Mar-10Mar-

11Mar-

12Mar-

10 Mar-11 Mar-12 Mar-10 Mar-11 Mar-12

10. Research & Development

Total Expenditure on Research & Development 1733 4163 3695 142 729 512.2 219.6 319.8 337.1

11. FOREIGN EXCHANGE EARNINGS & OUT GO

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Company)


11. Foreign Exchange Details

Earnings (In Rs. Cr.) 3554 3498.8 3691.8 2099.5 2374 1850.5 0.9 1.12 2.76

Out (In Rs. Cr.) 5707.1 6336.7 6878.7 1209.6 952.1 967.19 486.53 1596.48 1481.97

CONCLUSION Inference Drawn from Financial Results of the

Company: - On the Basis of Financial results of the All the

three Companies, it is clear that Profit after Tax (PAT) of Mar-12 has increased in comparison to last 2 years of only two companies named Tata Steel Ltd from Steel Sector and NTPC Ltd from Power Sector, but there is huge decline in PAT of Maruti Suzuki India Ltd from Auto Sector in comparison to last 2 years performance.

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CONCLUSION CONTI…..

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Inference Drawn from Dividend Information of the Company: -

On the basis of Dividend Information, it is clear that

Tata Steel Ltd. from Steel Sector is the company in which director’s Recommended dividend in Mar-11 & Mar-12 is higher in comparison to other two companies directors’ Recommended Dividend in Mar-11 & Mar-12 but the Total Amount paid for Dividend is the highest of NTPC Ltd. from Power Sector in all the three years in comparison to other two companies Total Amount for Dividend Paid in all the three years named Maruti Suzuki India Ltd. from Auto Sector and Tata Steel Ltd. from Steel Sector.


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Inference Drawn from Rating of Financial Instruments of the Company: -

After analyzing the above table regarding the Rating of Financial Instruments, it is clearly shown that Tata Steel Ltd. from Steel Sector is the only company out of the three which has not issued any financial instrument (Debt Instrument) since it does not have requirement of debt from the market. But remaining two companies named Maruti Suzuki India Ltd. from Auto Sector and NTPC Ltd. from Power Sector have issued their financial instruments (Debt instruments) in the market and these financial instruments have been rated by CRISIL which is showing the debt sovereignty of the company.


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Inference Drawn from Concern for Enviornment of the Company: -

Above table is clearly showing that all the three

companies have got award which reflect the environment concern of the companies. Tata Steel Ltd. from Steel Sector is the company which is having greater number of awards in comparison to other two companies, NTPC Ltd. from Power Sector is the Company having the lowest number of awards to its credit but all these awards have been presented to it by the Government of India.


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Inference Drawn from Details of Subsidiaries of the Company: -

“In terms of general approval granted by the Central Government under Section 212(8) of the Companies Act,1956, Copies of Balance Sheet, Profit and Loss Account, Report of the Board of the Directors and the Report of the Auditors of the Subsidiary Companies have not been attached with the Balance Sheet of the Company. The Company will make available these documents and related detailed information upon request by any shareholder of the Company / Subsidiary interested in obtaining the same.”

It is clearly showing that Tata Steel Ltd. from Steel Sector is the Company which is having greater number of subsidiaries in all the 3 years in comparisons to two other companies.

.


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Inference Drawn from Human Resources of the Company: -

On the basis of No. of Employees Tata Steel Ltd.

from Steel Sector is the company which is having greater number of Human Resources in all the three years in comparison to two other companies and NTPC Ltd. from Power Sector is the second one.


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Inference Drawn from Details of Directors of the Company: -

All the companies are having balance position of

Independent Directors, Non – Independent Directors, Executive Directors & Non – Executive Directors.


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Inference Drawn Discloser of Accounting Standards: -

All the three companies have disclosed the

Accounting Standards which they have followed.


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Inference Drawn from Details of Auditors: - NTPC Ltd. from Power Sector is having total six

Auditors in all three years while the other two companies are having only one Auditor in all three years.


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Inference Drawn from Research and Development: -

After analyzing the Research and Development

from the above table, it is clear that Maruti Suzuki India Ltd. from Auto Sector is the company whose expenditure on Research and Development is greater in comparison the other two companies.


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Inference Drawn from Foreign Exchange Earnings and Out Go: -

After analyzing the Foreign Exchange of all the

companies, it is clear that Tata Steel Ltd. is the company from Steel Sector which has positive Net Foreign Exchange Surplus in comparison to other two companies.

MAJOR CONCLUSION

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Conclusion: - “After seeing all the content of Directors Report of all the companies, it is clear that Director’s Report is the only Report which shows the company real picture in true sense. And it is the report which the direct communication to the shareholders in reality.”

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Documents

director's Report